Category: Infrastructure

President Biden met with congressional leaders this week to find a path forward on his $2.3 trillion infrastructure-focused American Jobs Plan. Republicans agreed to continue negotiations and develop a pared down counter-proposal that will limit the definition of infrastructure and include specific funding measures. (CNBC and Wall Street Journal, May 12 and The Hill, May 13) 

Negotiations on Scope 

• Biden’s multitrillion-dollar proposal calls for funding infrastructure investments by raising the corporate tax rate to 28% from 21% and making other changes to tax laws passed during the 2017 overhaul.
• “The proper price tag for what most of us think of as infrastructure is about $600 to $800 billion,” McConnell said on May 9. (CBS News, May 10 and Kentucky Educational Television, May 10)
• Biden and Vice President Kamala Harris on May 12 met with the “Big 4” Congressional Leaders – Republican Senate Minority Leader Mitch McConnell of Kentucky, House Minority Leader Kevin McCarthy of California, Democratic Senate Majority Leader Chuck Schumer of New York and House Speaker Nancy Pelosi of California – to discuss infrastructure proposals. Although both sides remained deeply divided over the scope of an infrastructure package and exactly how to pay for it, some optimistic signs emerged from the meeting. (New York Times, May 12)
• McConnell commented after the meeting, “We’re not interested in reopening the 2017 tax bill. We both made that clear with the president. That’s our red line.” (Business Insider, May 12)
• However, McCarthy added, “there is a place where we can find bipartisanship” –  and Pelosi noted, “I feel very optimistic . . . about our ability to pass such a bill, more optimistic now about being able to do so in a bipartisan way. But we’ll see.” (Tax Notes, May 13) 

Republican Counter-Offer

• Biden and Harris also met on May 13 to discuss infrastructure with a group of top Republican committee leaders, including Sen. Shelley Moore Capito of West Virginia, ranking member on the Senate Environment and Public Works Committee. (White House Readout of Oval Office Meeting, May 13)
• During the meeting, Republicans suggested using public-private partnerships to partially cover the costs of funding an infrastructure bill, instead of reversing elements of the 2017 tax bill. (The Hill, May 13)
  

   

  
  
• Capito commented after the meeting, “I think what he wants to see is ‘OK, I get it you don’t want me to touch the 2017 taxes … well then how are we going to pay for this.’ The [Paycheck Protection Program] was part of the discussion but there were other things discussed.”
• Capito added, “He asked that we would come back with another offer, with more granularity to it and more details, and so we agreed to do that. Maybe some different numbers too.” (The Hill, May 13)
  

   

  
  
• The president also met with key Democratic senators, including Joe Manchin of West Virginia and Kyrsten Sinema of Arizona, this week to discuss infrastructure measures proposals.
• Congressional Republicans are expected to propose their counter-offer for a pared-down infrastructure program next week.

Roundtable Statement

• Real Estate Roundtable President and CEO Jeffrey DeBoer on April 30 issued a statement on funding options for President Biden’s American Jobs Plan and American Families Plan.  
• DeBoer noted, “As policymakers consider the options to raise this needed revenue, we strongly urge that the focus be on broad-based tax increases that do minimal damage to job creation, risk taking and entrepreneurial activity. Unfortunately, particularly when considered in total, many of the tax proposals accompanying the American Jobs Plan or American Families Plan would reduce economic activity, impede job growth, and diminish opportunities for startup businesses and those less advantaged. The current law in these areas may be in need of review and reform, but repealing these incentives is simply not wise.” (Full Roundtable statement)

The initial release of President Biden’s American Jobs Plan on March 31 listed several corporate tax revenue measures to offset infrastructure spending. Further details on the Administration’s proposed tax and revenue provisions are scheduled to be released on May 27 as part of the president’s FY 2022 budget proposal. (Reuters, May 13) 

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President Joe Biden on March 31 announced the first part of his sweeping economic growth proposal focused on infrastructure and clean energy – a $2.3 trillion, eight-year plan that White House officials said would be funded, over 15 years, by corporate and international tax increases. (Wall Street Journal and White House Fact Sheet: The American Jobs Plan, March 31)

Why It Matters

• The enormous scale of the proposal seeks to use federal spending to address a wide-range of economic and social issues widely defined as infrastructure while strengthening America’s long-term competitiveness against challengers like China.
• Biden stated, “It’s a once-in-a generation investment in America, unlike anything we’ve seen or done since we built the Interstate Highway System and the Space Race decades ago.” (Remarks by President Biden on the American Jobs Plan, March 31)
• The White House proposal would direct federal spending to transportation, manufacturing, buildings, schools, water systems, broadband, health care, and energy infrastructure assets. (USA Today, April 1, “These 4 charts show where the money would go”)
• A “Made in America Tax Plan” would pay for the proposal. It would increase the corporate tax rate from 21% to 28%; set the minimum tax for multinational corporations with U.S. operations at 21 percent; and eliminate certain incentives affecting the offshoring of jobs. (The Hill, March 31)

Impact on CRE

• The Biden proposal would spend $213 billion to produce, preserve, and retrofit two million homes and commercial buildings. In particular, it recommends:
  • Tax credits and grants with a goal of one million new and renovated, affordable and efficient, rental housing units;
  • Extend and expand energy efficiency tax incentives for homes and commercial buildings;
  • A new competitive grant program for cities and localities that eliminate exclusionary zoning policies – like minimum lot sizes, mandatory parking requirements, and density restrictions;
  • Mobilize private sector investment in distributed energy resources, and to de-carbonize the electric grid;
  • Drive clean energy deployment by requiring federal buildings to purchase 24/7 clean power; and
  • Support private development of idle Brownfields into hubs of economic growth.

• The proposal does not affect the federal eviction moratorium, which was recently extended by the Centers for Disease Control and Prevention (CDC) until June 30. (CDC order and CNBC video, March 30)

Transportation Infrastructure

• $115 billion in the White House proposal would focus on repairing Main Street roads, highways and bridges.

• $80 billion would be devoted to inter-city high-speed rail to address Amtrak’s repair backlog and modernize the Northeast Corridor.  This is of significance to national and regional projects like “Gateway,” the rail tunnel project between New York City and New Jersey.

What’s Next

• Senate Minority Leader Mitch McConnell (R-KY) said, “This proposal appears to use ‘infrastructure’ as a Trojan horse for the largest set of tax hikes in a generation,” and that Biden’s proposal “is not going to get support on our side.” (The Hill, March 31 and Bloomberg, April 1)
• House Speaker Nancy Pelosi (D-CA) signaled she would like to see an infrastructure bill pass the House by July 4. She added that “hopefully” a final infrastructure package will include a repeal of the $10,000 cap on state and local tax deductions. (Associated Press, March 31 and BGov, April 1)
• The Roundtable is part of the Build by the 4^th coalition, led by the U.S. Chamber of Commerce, which encourages the Biden Administration and Congress to pass a comprehensive infrastructure deal by Independence Day 2021.
• The Biden administration is planning a second legislative package for April that could seek an additional $1 trillion to expand family support such as the child tax credit and paid leave. (B-Gov, March 31)

President Biden’s infrastructure plan will be a focus of discussion during The Roundtable’s April 20 Spring Meeting (remote).

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The Biden Administration released a policy letter on Feb. 16 enabling states to more readily access federal grant dollars to help finance mass transit and other large-scale transportation projects. (FTA “Dear Colleague” letter and CQ, Feb. 16).

• The letter from Acting Federal Transit Administrator Nuria Fernandez reverses Trump-era policy from 2018. The earlier policy restricted the amount of transportation money states could receive from the U.S. Department of Transportation (DOT) through the Capital Investment Grants (CIG) program if the project also received a low-interest DOT loan.
• The Feb. 16 letter clarifies that DOT loans extended under the Transportation Infrastructure Finance and Innovation Act (TIFIA) or the Railroad Rehabilitation & Improvement Financing (RRIF) program – when repaid with non-federal funds – can count toward the state’s cost-share requirement to also qualify for a “new starts” CIG grant.
• The Roundtable has long supported the FTA’s recent step. “Loans repaid [by states] with interest are fundamentally different instruments than grants awarded with no repayment obligation,” The Roundtable noted in a 2019 letter to the House’s Transportation and Infrastructure Committee.  The letter added, “Credit-worthy state and local project sponsors who successfully navigate the TIFIA loan process should not be penalized for seeking a CIG grant as a separate, necessary layer in the capital stack to finance a massive transit project.” (Roundtable Weekly, May 3, 2019)   
• The FTA’s policy change should help large-scale transportation projects of national and regional significance that may qualify for both CIG grants and TIFIA loans.  [See nationwide lists of CIG projects and TIFIA projects.] One prominent example is the New York-New Jersey Gateway Program, a $30 billion modernization of Amtrak’s Northeast Corridor.
• Senator Bob Menendez (D-NJ) applauded the Biden Administration’s action, noting that the effect of the 2018 policy was to “stall the Gateway project” which includes replacing a 110-year-old bridge and construction of a “new Trans-Hudson rail tunnel.” (Menendez press release, Feb. 16)
• The Real Estate Board of New York (REBNY) applauded the Biden FTA’s move.  “Restoring access to federal funding for Gateway is an initial but pivotal step toward advancing the project, which will improve mass transit service for millions of commuters, create thousands of good jobs and play a significant role in getting our regional and national economics back on track,” said REBNY President Jim Whelan. (REBNY news release, Feb. 18) 

Movement on Infrastructure

• Biden Transportation Department Secretary Pete Buttigieg hinted at the FTA’s policy change during his January confirmation hearing, emphasizing that he was committed to working with lawmakers on projects such as Gateway. (Bloomberg, Jan. 21, 2021)
   
• Also this week, President Biden discussed plans to improve the nation’s infrastructure with labor leaders, including Sean McGarvey, president of North America’s Building Trades Unions. (Wall Street Journal and White House Remarks, Feb 17) Roundtable President and CEO Jeffrey D. DeBoer and McGarvey discussed infrastructure policy in a video interview released during RER’s annual meeting last June. (Roundtable Weekly, June 19, 2020)
   
• The Biden Administration is expected to reveal its infrastructure package soon as part of its “Build Back Better” agenda to spur economic recovery from the repercussions of the pandemic.
   
• Additionally, The Senate Environment and Public Works Committee has scheduled a hearing on transportation infrastructure on Feb. 24, entitled “Building Back Better: Investing in Transportation while Addressing Climate Change, Improving Equity, and Fostering Economic Growth and Innovation.” 

The Roundtable’s recommendations regarding infrastructure financing and permitting will again be featured in our forthcoming 2021 Policy Agenda. The Roundtable is also a member of the  “Build by the 4^th”coalition, led by U.S. Chamber of Commerce, which urges Congress to pass a comprehensive infrastructure bill by Independence Day 2021. 

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The critical need for investing in modern and sustainable infrastructure was the focus of a Feb. 11 White House meeting between President Joe Biden, Vice President Kamala Harris, Transportation Secretary Pete Buttigieg, and a bipartisan group of senators from the Environment and Public Works (EPW) Committee.

• The Senate EPW committee was represented by Chairman Thomas Carper (D-DE), Transportation Subcommittee Chairman Ben Cardin (D-MD), Ranking Member Shelley Moore Capito (R-WV), and former Chairman James Inhofe (R-OK).
• Biden stated at the meeting that the EPW Committee “is central to everything that’s going to happen” on infrastructure. (White House Remarks and meeting video, Feb. 11). White House Press Secretary Jen Psaki remarked that the meeting “was a reflection of how important it is [for Biden] to meet with bipartisan leaders and have a discussion about what’s required in states and communities.” (White House press conference video, Feb. 11) 
• The president noted the importance of investing in infrastructure to maintain Americas’s international competitiveness, referring to China’s advancements in high-speed rail and automobiles by stating, “if we don’t get moving, they’re going to eat our lunch.” (Washington Post, Feb. 11)
• Sen. Cardin said after the meeting that “it’s going to be a challenge to… have adequate revenues to fund transportation moving forward.” Congressional focus on an infrastructure package is widely expected to take place after the legislature acts on the next round of COVID-19 relief. (Politico, Feb. 11). 
• Sens. Cardin and Carper led a Feb. 9 letter from nearly 50 Democrats from both the House and Senate to Secretary Buttigieg, regarding the need for federal transportation policies to create jobs while also reducing carbon pollution, with an emphasis on reducing vehicle tailpipe emissions.
• In a December 16, 2020 letter, The Roundtable and 12 national real estate organizations provided detailed recommendationsto then President-elect Biden and Vice President-elect Harris that included infrastructure funding and modernization as engines to drive recovery and job growth from the economic fallout of the COVID-19 pandemic. 
• The December industry letter stated, “A strong national infrastructure is vital to the health of the nation’s real estate, and vice versa. Roads, bridges and mass transit enhance the values of nearby properties, which in turn generate greater tax revenues to fund even more infrastructure assets.”
• The Roundtable is also part of Build by the 4^th coalition led by U.S. Chamber of Commerce, which encourages the Biden Administration and the new Congress to pass a comprehensive infrastructure deal by Independence Day 2021.

The Biden Administration is expected to reveal its infrastructure package soon as part of its “Build Back Better” agenda to spur economic recovery from the repercussions of the pandemic.

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House Democrats on July 1 passed a sprawling $1.5 trillion infrastructure package (the Moving Forward Act, H.R. 2) largely along party lines (233-188). The bill would reauthorize spending for the nation’s roads, bridges and mass transit transportation – and also addresses housing, water, broadband, renewable energy, electric grid, and education infrastructure.  (Wall Street Journal and Washington Post, July 1) 

• The broad Democratic package reflects the party’s blueprint for infrastructure priorities in the lead-up to the November elections. (Politico, July 1) H.R. 2 includes climate-related provisions that would require states to measure and reduce emissions from transportation systems, which account for the nation’s single largest source of greenhouse gases. (U.S. Energy Information Administration) 
• H.R. 2 would also support mass transit and other low-emissions transportation modes with more money, and spur greater electrification of vehicle fleets.
• H.R.. 2 faces steep GOP opposition. (E&E News, June 29) Senate Majority Leader Mitch McConnell (R-KY) said the measure is “not going anywhere in the Senate” due to its price tag and focus away from highways and more traditional surface transportation funding. (The Hill, July 1)
• The White House threatened to veto H.R. 2 because it includes “‘Green New Deal’ initiatives” and “fails to tackle the issue of unnecessary permitting delays, which are one of the most significant impediments to improving our infrastructure.”  (Statement of Administrative Policy, June 29) The Trump administration is reportedly preparing its own $1 trillion infrastructure proposal. (Reuters, June 15)
• A core component of the House-passed legislation is a $494 billion surface transportation bill – the INVEST in America Act – that would reauthorize funding for the Highway Trust Fund, which is scheduled to expire on September 30. Action on the Highway Trust Fund has been considered a “must-do” policy item before the November elections (Roundtable Weekly, June 19 and June 26)
• A National League of Cities survey shows that coronavirus-related expenses have forced more than 700 U.S. cities to suspend or terminate plans to upgrade critical infrastructure. (Washington Post, June 23)

Job-creating infrastructure legislation could become a major focus for lawmakers in the second half of 2020 as high unemployment levels linger amid increasing uncertainty about business reopenings during the pandemic.

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House Democrats on June 22 released details of a $1.5 trillion infrastructure package – the Moving Forward Act  (H.R. 2) – that they plan to bring to a vote before July 4, although the measure’s prospects in the GOP-controlled Senate are uncertain. (Bill Text | Section-by-Section | Fact Sheet)

• The comprehensive Democratic infrastructure package, totaling about $1 trillion, has been combined with a $494 billion surface transportation bill – the INVEST in America Act – that would fund roads, bridges, and mass transit before current finding for the Highway Trust Fund expires on September 30.   (House Transportation and Infrastructure Committee news release, June 22)

• The broad Moving Forward Act also addresses the nation’s housing, water, broadband, clean energy, and education systems.  More than 300 amendments to the package are expected to be considered on Monday by the House Rules Committee before it is advanced to the House floor.  (Miller & Chevalier, June 25)

• About two-thirds of the infrastructure package does not appear to have specifics for funding, although some financing measures are listed for elements of the bill.  (CQ, June 22). 

• The House Transportation and Infrastructure (T&I) Committee issued an excerpt of the 2,309-page bill containing the revenue provisions. 

• Rep. Richard Neal, (D-MA), chair of the House Ways and Means Committee, floated the idea of reinstating “Build America” government bonds that could help spur private investment, as well as “a massive expansion of the Low Income Housing Tax Credit”. (Ways & Means news release, June 18) 

• Rep. Sam Graves (R-Mo.), T&I’s Ranking Member, last week announced an alternative bill for surface transportation programs and on June 23 stated, “Now the bill has been completely swallowed up … and turned into a colossal $1.5 trillion wish list for the Majority.”

• The Trump administration is reportedly preparing a nearly $1 trillion infrastructure package proposal focused on transportation projects. (Reuters, June 15)

• The critical need for infrastructure improvements was supported this week by a National League of Cities survey, which showed that coronavirus-related expenses have forced more than 700 U.S. cities to suspend or terminate plans to upgrade critical infrastructure.  (Washington Post, June 23)

“The survey found that 65% of cities are being forced to delay or completely cancel capital expenditures and infrastructure projects, which will not only stifle job growth and slow local economic activity, but further jeopardize economic recovery efforts in communities across the nation,” said Clarence Anthony, CEO and Executive Director, National League of Cities. “Without congressional action now, the forced delay or cancellation of infrastructure projects will create an economic ripple effect throughout the nation not felt in decades.” (National League of Cities, June 23)

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House Speaker Nancy Pelosi (D-CA) and several Democratic chairs are using a surface transportation bill as a base for a broader $1.5 trillion infrastructure plan they announced yesterday, to also invest in the nation’s housing, water, broadband, clean energy, and education systems.  (POLITICO, June 18 – see also Pelosi remarks and Youtube video, June 18).

• Action on transportation infrastructure is considered a “must-do” item in Congress before the November elections because the nation’s main source to fund roads, bridges, and mass transit – the Highway Trust Fund – expires on September 30.  (New York Times, June 17)
• The Democratic surface transportation piece – the INVEST in America Act – would authorize $494 billion in spending over five years. Key elements of this bill align with Roundtable policies, such as state/local cost share allocations that would help finance significant projects like the Northeast Corridor Gateway Program. (Roundtable Weekly, June 5 and Bill text | Factsheet | Bill Summary | Section-by-Section)
• Meanwhile, the Ranking Member on the House Transportation and Infrastructure Committee, Sam Graves (R-MO), announced an alternative bill for surface transportation programs. The Republicans’ STARTER Act (section-by-section summary) would bolster permit streamlining and the “One Federal Decision” framework, measures long-supported by The Roundtable.  (Roundtable Weekly, August 2, 2019)  
• Pelosi said yesterday that the comprehensive Democratic infrastructure package – the Moving Forward Act – would “make real the promise of building infrastructure in a green and resilient way,” and that “[i]t’s job-creating in its essence, but also commerce-promoting.”  (The Hill, June 18). A framework for the omnibus measure was released in January.  (Roundtable Weekly,  January 31)
• The critical issue with any infrastructure proposal is how to pay for it. House Ways and Means (W&M) Committee Chairman Richard Neal (D-MA) yesterday outlined several tax provisions to be included in the Democratic leadership’s measure.
• Neal stated, “We leaned on our tax code and will reinstate Build America Bonds, to not only provide financing to state and local governments but also spur investment in the private sector,” according to a W&M Committee press release. “There is a desperate need for modernizing low-income housing, and the Committee proposed a massive expansion of the Low Income Housing Tax Credit to get us there.” A W&M fact sheet outlines other provisions.  
• The Senate is expected to focus on infrastructure in the coming weeks after the House acts. Last summer, the Senate Environment and Public Works Committee (EPW) unanimously approved a five-year, $287 billion surface transportation plan. (Roundtable Weekly, August 2, 2019).

The Trump Administration has long stated that infrastructure is one of its top priorities. It is reportedly preparing another $1 trillion plan that it may present to Congress next month.  (Bloomberg, June 16) Pelosi said yesterday she anticipates the Democratic Moving Forward Act will come to a House vote before Congress breaks for the July 4^th recess and urged the Administration to begin negotiations about funding it.

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A five-year, $494 billion surface transportation bill unveiled June 3 by House Transportation and Infrastructure Committee Democrats would authorize highway, railroad, and transit programs to replace the current $226 billion Highway Trust Fund that expires on Sept. 30.  (The Investing in a New Vision for the Environment and Surface Transportation in America – INVEST in America Act – Bill text | Factsheet | Bill Summary | Section-by-Section)

• Rep. Peter DeFazio (D-OR), chairman of the Transportation and Infrastructure (T&I) Committee, said, “We are in multiple crises at the moment …  But we have to move forward with our very important reauthorization of surface transportation.  (BGov, June 3)

• The INVEST in America Act is part of a $760 billion “Moving Forward Framework” rolled out in January by House Speaker Nancy Pelosi (D-CA) with the chairs of three House committees to address national infrastructure investment.  (Roundtable Weekly, Jan. 31, 2020)

• A plan on how to pay for the new bill has not yet been determined by the House Ways and Means Committee.  The Roundtable submitted extensive comments on infrastructure policy to both committees last year.  (March 20, 2019 W&M comments; April 29, 2019 T&I comments.)

This week’s T&I bill contains elements that align with Roundtable policies including:

• Improve the Transportation Infrastructure Finance Innovation Act (TIFIA) loan program to encourage more public-private partnerships for infrastructure projects;

• Encourage high-density, transit-oriented development by incorporating the Build More Housing Near Transit Act (H.R. 4307), which would require localities applying for Federal Transit Administration grants to assess feasibility of affordable housing construction along mass transit routes (Up for Growth Action’s 1-page summary);

• Authorize a Vehicles Miles Travelled (VMT) pilot program as a potential, more sustainable funding source for the Highway Trust Fund as opposed to the controversial federal “pay-at-the-pump” gas tax;
• Revise current Capital Investment Grant (CIG) and TIFIA program state/local “cost share” commitments to allow funding for major projects (like the New York-New Jersey Gateway Program along the Amtrak Northeast Corridor); and
• Prioritize use of Highway Trust Funds with a “fix it first” strategy to focuses on repair and rehabilitation of decaying infrastructure.

• The House bill also includes measures on climate resiliency and Amtrak that are expected to face opposition by the Republican majority in the Senate.  For example, the measure would require the U.S. Department of Transportation (DOT) to establish new greenhouse gas performance measures, and authorize a new DOT program to support carbon pollution reduction.

• The Democratic T&I committee bill is considered the first salvo in the transportation funding debate to reauthorize the Highway Trust Fund before it expires on September 30, 2020.  Additional committees from both the House and Senate need to produce other portions of the final legislation.

• The T&I committee is scheduled to consider the INVEST in America Act on June 17 – and a vote on the House floor is could occur at the beginning of July. (BGov, June 3)

• The need for infrastructure investment to help restart the economy and encourage long-term  growth was also the focus of a June 3 meeting between President Trump and New York Gov. Andrew Cuomo at the White House.  (Wall Street Journal and New York Times, June 3)

• Gov. Cuomo said, “It was about: How do we supercharge the reopening?  It was a good conversation.”  The two policymakers discussed obstacles to federal funding and expedited approvals for significant New York transportation initiatives such as the Gateway Project, which would require new rail tunnels under the Hudson river.  (WSJ, April 18, 2019)

• President Trump on June 4 signed an executive order that cites an economic emergency to waive laws for expediting federal approval for highways, pipelines and other projects.  The Washington Post cites a senior administration official stating that the action will help the economy recover from novel coronavirus losses.  (Washington Post, June 4)

The Real Estate Roundtable will host an infrastructure discussion with Gov. Cuomo on June 11 during the organization’s first Virtual Annual Meeting.

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